SmartBiz became the first financial-technology firm to receive regulatory approval to be a bank since President Donald Trump took office in January, a regulatory signal that other fintechs could also get the green light to cement their footholds in the financial-services industry.
The Office of the Comptroller of the Currency and the Federal Reserve Bank of Chicago approved SmartBiz’s acquisition of Northbrook, Illinois-based Centrust Bank NA, SmartBiz said in a statement Monday. It’s the first time a fintech company has become a bank since 2021, during Trump’s first term as president.
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“The main reason we’re doing this is ultimately to serve small businesses really well that aren’t being that well-served today by banks across the country,” SmartBiz Chief Executive Officer Evan Singer said in an interview. “There’s a huge opportunity to do that.”
A representative for the OCC said it does not comment on specific banks or pending decisions. A representative for the Federal Reserve didn’t immediately respond to requests for comment on the approval.
San Francisco-based SmartBiz specializes in small-business lending, an offering that boomed during the pandemic, Singer said. In 2021 alone, 5.4 million new business applications
Klaros Group partner Michele Alt, who also advised SmartBiz through the process, said more approvals are likely to come under the Trump administration.
“After four years of the regulators having drawn up the gate over the moat,” she said, “the gate has been lowered again.”